Real estate investment growth slows down

Booming property markets, especially China’s residential market, have raised concerns of a coming bubble and prompted governmental measures to tame housing prices. In this part, we’ll analyze China’s property market growth.

How China’s Property Market Could Affect Iron Ore Prices

Real estate investments rose 10.2% YoY (year-over-year) in April, lower than the 10.8% YoY growth they registered in March. According to Reuters, in the first four months of the year, growth slowed down to 10.3% from 10.4% in the first quarter.

Slower growth in sales and construction starts

Also, real estate developers are launching fewer new projects due to weak sales growth. According to Capital Economics analysts, this is mostly because of slower lending and tighter property market controls.

In April, property market sales fell 4.1% YoY in April, marking their worst monthly performance since October 2017. In comparison, they grew 32% YoY in March. New construction starts’ floor area grew 2.9% YoY, a sharp deceleration from the 17.8% YoY growth seen in March.

Is China’s property sector cooling?

While China’s property market (TAO) is showing signs of cooling down, according to the latest data, its growth still remains quite strong. Some of the slowdown may be due to the government’s efforts to curb property market speculation. Authorities are trying to maintain a consistent housing policy, and their policy measures seem to be having an effect.

A crackdown by Chinese authorities on the property market could mean a tougher road ahead for iron ore miners. While Vale (VALE), the world’s largest iron ore producer, is based in Brazil, BHP’s (BHP) (BBL), Rio Tinto’s (RIO), and Cleveland-Cliffs’ (CLF) major seaborne operations are in Australia.

Latest articles

German chip maker Infineon Technologies has reportedly raised 1.55 billion euros (~$1.74 billion) in capital by selling its shares to fund its acquisition of Cypress Semiconductor (CY). Infineon has sold ~113 million new shares at 13.70 euros each.

As of June 18, Dunkin’ Brands (DNKN) was trading at $80.07, an 8.9% rise since reporting its first-quarter earnings on May 2. Also, DNKN was trading at a premium of 29.8% from its 52-week low of $61.69 and a discount of 1.6% from its 52-week high of $81.40.

19 Jun

Are Lower Oil Prices Weighing on ExxonMobil Stock?

WRITTEN BY Maitali Ramkumar

ExxonMobil (XOM) stock has fallen 7.1% in the second quarter so far. Let's review ExxonMobil's stock performance in comparison to oil price changes and equity market movements in the quarter.

19 Jun

As Facebook Unveils Libra, MSFT and CRM Join a Blockchain Group

WRITTEN BY Mayur Sontakke, CFA, FRM

On June 18, Facebook (FB) launched Libra, its own cryptocurrency. On the same day, CoinDesk published another piece of blockchain news that didn’t receive as much fanfare as Facebook’s Libra news. Was the timing a coincidence? We think not.

Uber Technologies (UBER) has picked Melbourne as another test site for its flying taxi service known as UberAir. The Australian city is the first international test site Uber has chosen for its flying taxi service. The addition of Melbourne brings the number of test locations Uber has picked for its UberAir service to three.

Lyft (LYFT) and Uber Technologies (UBER) are pushing back against California legislation that would require them to recognize their drivers as employees rather than independent contractors. The legislation would require companies like Lyft to give their drivers the compensation and benefits spelled out under California’s employment regulations.